beyondbrics

By Mian Mohammad Mansha

The benefits of trade, especially in the global village, are well known. Neighbours such as India and Pakistan are especially well-placed to profit from doing business together due to their common heritage, languages, and physical proximity. Together, both nations could spread the economic benefits from increasing trade to large sections of their people.

Given the history of conflict, distrust and bureaucratic inertia in India-Pakistan relations, this won’t happen overnight. But a stronger emphasis on developing common interests in bilateral trade could move things forward. An Indian delegation’s visit to Pakistan last week was a small step on the right road, which could one day be followed by giant strides.

The key lies in developing ‘mutual interest’.  Without this underlying logic, the piecemeal dialogue between the two countries on opening wide our borders for trade has so far brought litte result.

I welcome last week’s decision by Pakistan to commit to expanding imports from India to include almost 9000 goods, up from the current 1900 items. This was no mean achievement. A year down the line,  as the manifest benefits of growing bilateral trade become more apparent, the ‘negative list’ of restricted import categories will surely be ready for further trimming. Eventually true most-favoured nation (MFN) status can be bestowed mutually without any petty conditions.

Obviously, vested commercial interests on both sides will try and thwart such initiatives. Some of these are in the security business,  while others are in high-cost industries that may be threatened by better-value imports from the other side. But this too shall pass if the ruling establishments in both countries see the folly of their past ways and welcome new opportunities for their impoverished people.

Businessmen and industrialists from both countries already have cordial relations with each other. These will be strengthened when they start sharing products and services from which they stand to benefit. For instance, privatized banks in Pakistan are well capitalised, and Indian businesses should welcome their branches to facilitate import-export transactions. Traders across the border can plug into each other’s cotton harvests, which take place at different times of the year in each country.

People-to-people and sporting relations would also improve with a growth in trade, especially if it is accompanied by more liberal visa policies. One need hardly mention the enthusiasm of cricket and hockey fans, who are already big markets for business in both countries.

Shared historical memories, food, travel, culture, language and tradition are obvious connections between the two countries. And there will be synergies aplenty as the maps unfold. For instance, the northern part of India has a shortage of limestone, which can be easily imported from Pakistan. Gypsum for fertilizers, home textile products and even citrus fruits from north Pakistan and Afghanistan can be imported to India.

Likewise, Pakistan can benefit from India by importing fuel and agricultural products, updated IT-related technologies and textiles. And best of all, tourism and the hospitality business will boom to quench people’s thirst for understanding about the ‘other’. My city Lahore may once again become the pearl of the east if Hindus, Sikhs and Muslims mingle as never before in the last six decades.

Certainly, the ascent of civilian democracy in Pakistan, whatever its limitations, is a good sign that the “national security state” based on fear of the ‘other’ is on the wane, and a social security state based on the welfare of its people is developing.

Last year, India’s trade with Pakistan was worth about $2bn,  or less than 0.5 per cent of $600bn in total.  Meanwhile, India accounted for only 1.2 per cent of Pakistan’s total exports worth nearly $25bn, and 4 per cent of its total imports worth $32bn. Compare this with the situation in 1947 at the time of partition, when it stood at nearly 60%. This proves that there is a dual carriage-motorway of trade waiting to be built between the two countries.

With trade will come economic growth which in turn generates jobs, rising disposable incomes and more competitive prices – in short, higher standards of living. Better still, talk of war and jingoism will dissipate with the creation of positive economic interests on both sides.

Let us together seize the moment.

Mian Mohammad Mansha is chairman of Nishat Group, Pakistan’s largest business conglomerate.

Related reading
Pakistan: more Bollywood, please, beyondbrics
Pakistan takes giant step with trade move, FT